Avoid these 10 mistakes of vacation home renting if you want to maximize the potential of your Mexico real luxury estate.
From Los Cabos luxury real estate to La Paz homes for sale, vacation rentals in Baja California Sur—Mexico’s 12th largest state—are a mainstay for this premier tourism destination. Sandwiched between the Sea of Cortez and the Pacific Ocean, Baja California Sur occupies the southern end of the Baja Peninsula and is not to be confused with California or Big Sur. It is known for its soft sand beaches, outstanding nature and wildlife, historical art forms, and its predominantly warm, dry spring and summer seasons.
At peak times, this area has drawn nearly 4 million tourists a year and is an integral part of Mexico's multi-billion dollar tourism economy. However, just because Baja California Sur attracts multitudes of vacationers every year doesn’t mean you should rest on your laurels or think renting your vacation rental will be a cakewalk. To effectively protect yourself and maximize returns on your property, avoid these common ten pitfalls.
Staying in the dark on local laws
Just as laws, codes, and rules govern real estate transactions in the United States, Mexico has its own laws and regulations regarding purchasing, selling, or renting houses in Mexico, whether you are buying as a foreigner or a resident.
Make sure to familiarize yourself with the nation’s laws. A good one to start with is that it’s illegal to transact real estate in Mexico without a licensed realtor. Don’t hesitate to ask your Baja California Sur real estate agent for additional information and recommendations to other professionals, such as real estate attorneys, who can further advise you.
Not getting the proper homeowners insurance
Vacation properties in Los Cabos tend to be close to the beach and other elements, meaning more unpredictable weather and potentially higher risks to your Cabo real estate. There’s also no telling if guests, on occasion, may cause damage to your rental that you’ll need to repair.
You will want to protect your investment by having Mexican homeowners insurance covering vacation rentals. Typically, U.S. homeowners insurance cannot extend to Mexico—something you can discuss with your Mexico luxury real estate agent. The more liability coverage you can get, the more you will be protected should the unexpected arise.
Not utilizing multiple listing sites
In today’s age of online travel agencies (OTAs), it’s easier than ever to reach a worldwide audience across multiple channels. These channels include Airbnb, VRBO, Orbitz, and Booking.com.
If you limit yourself to listing your vacation property on just 1 of these sites, you’re not fully utilizing the power of OTAs. Simply put, the more listing sites you post your Cabo San Lucas real estate on, the wider your audience becomes and the more views it gets, which, in turn, will lead to more bookings and profits.
Posting poor quality photos
With more vacationers looking online first when searching for Los Cabos real estate to rent, putting your best digital foot forward is key. If your Mexico vacation rental listing includes low quality, poorly lit, or too few photos, you’re seriously hurting your rental potential. Consider hiring a professional photographer to capture and market the best aspects of your Mexico luxury real estate. This may include the use of drone footage and video tours.
Ignoring dynamic pricing
Optimally pricing your vacation home may be one of the more complex aspects of renting your Cabo San Lucas real estate, but there’s help around the corner, so don’t be discouraged. Simply pricing your home according to peak and off-season price points may not be sufficient.
If you price your rental too high, you’re turning away customers. If you price it too low, you’re leaving money behind. Fortunately, dynamic pricing services can help you determine the best fee to charge in relation to local events, guest demand, and rental availability. Check out these services available from Evolve and Beyond Pricing.
Failing to fully automate your house
Today’s technology makes automating your Cabo San Lucas real estate more accessible than ever. Installing devices such as smart thermostats can help you save energy, monitor usage, and help you make adjustments from afar. In addition, keyless entry is a wise investment for vacation rentals because you won’t have the recurring costs of rekeying the door locks, and they eliminate the need to exchange keys in person.
Other smart home devices, such as Amazon Alexa, can boost the convenience factor of your rental and help make it feel updated and modern, leading to a better overall guest experience.
Avoid poor service
Conjure up all the subpar hospitality experiences you’ve had and how you felt about them. Now, it may be easier said than done, but try to avoid those things when it comes to your Cabo real estate.
Vacation property renting is all about hospitality and customer service, so failing to make your guests feel welcome is a surefire step towards poor hosting. Make sure to respond to any questions promptly and accommodate your guest’s needs as best as possible, including things like allowing late check-in. Keep in mind that bad hosting can have lasting repercussions, as it will likely lead to negative reviews for all the internet to see.
Not asking for reviews
Speaking of reviews, guests looking for potential rental properties always turn to a property’s online reputation before making a final decision. The fewer reviews your Los Cabos luxury real estate has, the less likely it will get rented.
On many OTAs, rental homes with higher numbers of reviews typically get better placement on the site, leading to more exposure. Therefore, to fully maximize the potential of your Mexico vacation rental, always ask guests to leave a review after their stay.
Not being transparent about drawbacks
Let’s face it, no place is perfect. Every rental property will have pros and cons. Whether an occasional nearby train whistle or a lack of parking, listing these drawbacks is essential. You may be tempted to ignore these elements since they may seem minor, but they could be the difference between a 1-star review and a 5-star review. If you’re upfront about your Cabo real estate, guests are less likely to feel tricked and more likely to have realistic expectations.
Ignoring the vacation rental industry
Within a few years, it’s estimated that one in five people will have stayed in a vacation rental. Between the internet and a rapidly changing world with a dynamic vacation rental industry, there is a greater demand for vacation rentals. In the glamorous markets of Los Cabos real estate and beyond, the profitability of investing in Mexican real estate has been a particular draw for foreign investors. To stay competitive with hotel chains and other vacation property investors, you’ll want to stay current in the vacation rental industry.
The best way to stay informed about Mexico luxury real estate—whether in magical Todos Santos or unspoiled La Ribera—is to consult with your experienced local luxury real estate agent. Coldwell Banker Riveras is the #1 Coldwell Banker office in Mexico and has seven offices to help you find the property you’ve always wanted.
Leticia Diaz Rivera, the lead broker, is the daughter of Don Manuel Diaz Rivera, who founded the first high-end residential community in Los Cabos. He formed the real estate group that eventually teamed up with Coldwell Banker to provide unparalleled luxury brokerage services in South Baja. Leticia and her team continue her father’s dream of providing premier real estate services in the area.
Contact Coldwell Banker Riveras today to make the dream of owning your luxury Mexican vacation property a reality and get the greatest return on your investment.
